Electronic trading of financial instruments has been implemented on many exchanges around the world. Financial instruments that are commonly traded on electronic exchanges include stocks, bonds, commodities, futures, options, currency, and others. Trading of electronic instruments is a highly competitive activity and one that relies on speed in the making, processing and filling of orders. Electronic traders have a distinct advantage over traders who utilize other means of trading due to the increased speed by which an order can typically be made, processed and filled. However, among other electronic traders, this advantage is greatly diminished. Thus, there is an ever-increasing need to escalate functionality with the hardware and network resources available to modern traders.
At the electronic exchange, a centralized host computer provides the general functions of matching and maintaining orders and positions, maintaining price information, managing the daily online trading database, and conducting nightly batch runs. The host computer also interfaces with external networks to quote prices and to provide other information. Traders can link to the host through one of the external networks, either directly or through other servers or gateways. Regardless of how the link to the host computer is established, traders must use software designed to manage the electronic trading process. The software generates trading screens that enable the trader to obtain market quotes, submit orders, and monitor positions while various trading strategies, such as correlation group trading and price normalization, are employed.
As mentioned above, the success and profitability of electronic traders is highly dependent on speed, including speed in determining when to place an order and at what price, and the speed in which the order can be sent to the marketplace. Because of the importance of speed, it is desirable for electronic trading software and systems to offer features that can assist the trader in making trades as quickly as possible and at the best prices available. Unfortunately, many electronic trading programs require considerable keystroke input. The time required to find and hit the correct keys can be enough to adversely affect the price (and hence, the profitability) at which an order is filled. Perhaps an even more important factor in a trader's overall profitability is enabling the trader to consistently submit accurate orders to an exchange, ECN or broker. Since most long-term profitable traders trade very frequently for ever-decreasing margins, the importance of such accuracy is increasing. A single errant trade can eliminate days, months, or years of profitability or even put a trading firm out of business.
What is needed, therefore, is a faster and more reliable way to place electronic trade orders.